by Sarah Squires
The message was clear Monday, when Winona County Commissioners met with local state legislators: expect a 10 to 20 percent cut in state funding when summer government aid checks come in the mail.
“We’ve got a $6 billion problem,” said Representative Gene Pelowski (Dist. 31A).
Legislators asked that local leaders come up with a list of state mandates that could be looked at for elimination. State mandates are government services and programs that the state imposes on counties and cities to administer. But when the funding cuts come, those mandates often stay, often meaning higher local property taxes to foot the bill.
County commissioner Dwayne Voegeli said that he’s heard that request — for a list of mandates that could be reduced — for years, and that most often, they don’t result in any action from legislators. County Administrator Duane Hebert asked that legislators also not create new mandates for local governments during such a difficult budgetary time. “Please, no new unfunded mandates,” he said. “Have the courage to make the decisions at the state level, don’t just pass the buck.”
Senator-elect Jeremy Miller (Dist. 31) and Senator-elect John Howe (Dist. 28), along with Rep. Steve Drazkowski (Dist. 28B), were also at the table, and the three Republican state leaders made it clear that their caucus was committed to fixing the state deficit estimated at $6.2 billion without raising taxes, although Miller said that he was willing to put all options on the table.
All four legislators were clear that, regardless of whether state tax increases come, there will be major changes to government operations from the top to the bottom. Proposals such as reorganizing the state’s 87 counties into 15 regions to provide services, and folding city police operations into county sheriff departments were discussed. Even reducing the size of the state House and Senate was mentioned as a way to reduce the state’s budget.
Senator-elect Miller said that in the past, the state has solved deficits by using temporary solutions like delaying K-12 education payments or relying on temporary stimulus dollars to get by. That won’t work as an answer to the state’s current funding dilemma, he said.
One big question at Wednesday’s meeting was how state leaders will work to correct a series of changes to the state’s Green Acres property tax program that have driven property taxes up for rural landowners. The changes pushed land considered nonproductive out of the program, then into a new program called Rural Preserve. Rep. Pelowski said that those changes were made by three people in a room behind closed doors during an eleventh hour effort to fix the budget, without realizing what the ramifications would be in the hilly landscape in southeastern Minnesota.
Winona County Assessor Steve Hacken said that the way that the Minnesota Department of Revenue sets rural land values is flawed, and the current situation with the Green Acres changes is forcing higher assessments on land like hillsides that produce no revenue for farmers. And, he said the Rural Preserve program will probably carry further unforeseen outcomes. “I think this Rural Preserve thing is just a nightmare waiting to happen,” he said.
State Legislators at the table said that creating a real fix for the Green Acres problems was a priority, and Rep. Drazkowski said that he felt Rep. Greg Davids’ first bill would be to address the problems the changes created. He said he thought that a full repeal of the changes instituted to the Green Acres program over the last few years would be the route taken to solve the issue.
Drazkowski said that government units need to begin looking at major changes in the ways they compensate employees, citing a recent study that showed state workers are being compensated at a higher rate than the private sector. He said that government leaders needed to begin looking at wage freezes, pension plans and take a stand against unions that continually push for wage increases.
First, he said, the state will have to look at service priorities, such as schools, roads and bridges, public safety, and taking care of those who can’t care for themselves. He said he has a very strong belief that budget problems can be solved without tax increases, but added it would require people to assume some personal responsibility.
Voegeli pushed the issue of whether Republican state leaders would be willing to raise taxes and make compromises, asking whether the party was too far to the right to make a tax increase compromise. “You are now in the driver’s seat,” he said.
Audience members asked why, when many governments are cutting budgets, there is a projected 26 percent increase in spending statewide. Miller said that health and human services costs were a big piece of the puzzle, as well as the expiration of one-time stimulus dollars.
Voegeli shot back that the biggest increase in expenditures he’s seen have come from rising health insurance costs for employees, asking when state leaders would address that. “That’s not government spending, that’s the private sector that’s sucking the government dry from the inside out,” he said.
Commissioner Marcia Ward said there were a lot of duplicated services across government lines that could be easily consolidated, like snow plowing. She said that in her neighborhood, there is a state highway department building just across the street from a county highway building, an example of a service that could be shared to reduce overhead and expenses.
The trouble with governments consolidating services, like cities and counties and school districts working together to create efficiencies, is that there are state statute and other legal hurdles that make some collaboration difficult or impossible. Audience members asked that state leaders begin to unravel that red tape so that new partnerships can be forged.
The bottom line? Government needs to change, legislators at the table agreed, and local governments like counties, cities and school districts need to prepare for those changes, because they are coming fast. Rep. Pelowski said that when Gov. Pawlenty proposed combining county government operations into regions it was met with a negative reaction. But, he said, local governments need to take the helm at finding the best way to begin to make some of these changes to governments because they are the ones who know the most about how to preserve services. The worst way the changes could come, he said, would be for the state to impose changes in a frantic way to solve the budget crisis.